Ryan Singer of 37signals blogged on the recent screw-up around profiles at Netflix:

Here’s another reason to double, triple, quadruple-check yourself
when you want to add a new feature. A while back Netflix added a
“Profiles” feature to their service. A couple weeks ago, they decided
to pull the feature
because it was too confusing and it wasn’t adding value. But it was too
late. People were pissed. The blog post received 1286 comments. In the
face of this reaction, Netflix had to turn 180 and keep the feature. Whether Netflix Profiles are good or bad, clear or confusing, they’re here to stay.

The
lesson: Once your user base has grown beyond a certain point, you
cannot take features away from them. They will freak out. Whether the
feature is good or bad, once you launch it you’ve married it. This
changes the economics of feature additions. If you can’t destroy what
you build, each addition holds the threat of clutter. Empty pixels and
free space where a new feature could be added are the most valuable real estate on your app. Don’t be quick to sell it, because you can never get it back.

I quoted the entire post since I think this is a very very important issue.

The temptation to add features if your product is not seeing the uptake you’d hoped for in the market is a big one.  Add to this the pressure that your competitors are putting on you through press releases on new features.  Then you’ve got your salespeople telling you that they keep hearing demands and desires from prospects…  It adds up, you give in, and pop comes a new feature, along with the baggage Ryan describes above.

I think it’s exceedingly rare that a web application’s success or failure is related to whether it’s feature-rich enough.